Ontario farm values vault to new heights

© AgMedia Inc.


Due to government policies that distort markets, and I'm not talking just Canadian policies, we will never know the true value of land. I remember going to a meeting in Holmesville many years ago, just before the full effect of ethanol had come into play to claim over 40% of the North American corn crop to push up crop prices, and sat there listening to a bunch of whining cash crop farmers complain to Paul Steckle about poor crop prices. Land was about 1/3 of what it is today, and now that we are seeing ethanol supported crop prices, a few established cash croppers and/or quota farmers now accuse other livestock farmers of whining according to some recent articles in farm papers. All to often many forget that they are successful only because the government has allowed them to be, off someone elses back. Raube Beuerman, Dublin, ON

Ethanol and supply management are nothing more than a tax on food, thereby giving grains farmers, and supply managed farmers, the legal right to confiscate wealth from those who can least afford to pay. Both were short-sighted responses to short-sightedness on the part of farmers who couldn't see the world beyond their farmgate - the land price bubble is what we deserve for ignoring human nature, good economic principles, and now, good investment principles. No more Ottawa rallies for me, unless it is to demand compulsory qualifications in economics before allowing people to own, and operate farms, or hold office in farm organizations.

Stephen Thompson, Clinton ON

So you think economics qualifications should be required for farmers.
You recently cited Eugene Whelan as an authority for personal attacks on people who don't agree with you. I don't recall him doing that but I won't argue with you. I do recall him publicly boasting many times that he never listened to economists.

If a background in economics is necessary for farmers, it should be obligatory for ag ministers - the reason Whelan was one of the worst ag ministers in living memory is because he not only never listened to economists, he launched what I've heard described as "scurrilous ad-hominem attacks" on any economist who disagreed with his policies. If farmers, and/or farm organizations, at the time of Whelan's tenure, had even the most-modest grasp of basic economic principles, they'd have been appalled at his boorishness, and his disdain for anyone with more than a grade-school education. That's the trouble with farmers - we know so little about economics that we disdain the people we should heed, and praise those who should be ignored.

Stephen Thompson, Clinton ON

If I recall correctly, the reason for the meeting at that point in time was “Equity with the U.S. Grain Farmers”. Even some U.S. based university economists were openly admitting the U.S. was dumping grain into Canada and world markets at a loss. So, please explain why you felt the U.S. wasn't guilty of dumping and subsidizing their grain farmers then? The reason we lost the countervail duty was not because Canada/Ontario grain farmers were wrong, it was because our gov't bodies succumbed to political pressure and the lobby of the livestock sector to not have a” level playing field for grain farmers” aka countervailing duty at that point in time.

The truth of the matter is that we were picking on the US Farm Bill because we were too timid to tackle the bigger problem - the disadvantage Ontario grains farmers faced at home because of the incomes and purchasing power accruing solely to supply managed farmers. Now that, thanks to the legislated albatross of ethanol, US grains farmers and Canadian grains farmers do have some sort of "equity", it is at the considerable expense of livestock farmers. Because of ethanol and supply management, there is no true sense of farm income, and therefore, no true sense of any income approach to value for farmland.

Stephen Thompson, Clinton ON

Speaking of "Cherry-Picking" in an attempt to disguise export dumping perhaps a discussion about..... Canadian livestock farmers having a distinct advantage with programs such as NISA, AgriInvest, Agristability and now RMP for livestock.

All of these programs are "ratchet-down" programs, and all require farmer contribution. Even worse is that RMP is an advance on the provincial portion of Agristability. Therefore only a "grasping at straws" supply management supporter could ever think that paying premiums into two programs, but getting benefit from only one, could ever justify gouging consumers by almost 38% through supply management - give your head a shake, my anonymous friend.

Stephen Thompson, Clinton ON

I would hope you know enough to know that gov is the ultimate example of the ratchet down effect . They justify their existance by down loading costs on the public while not show their true costs . At least with SM you know the cost and who is getting what .

"they justify their existance by down loading costs on the public while not showing their true costs". That is exactly what we have in supply management. The pundits of sm have always claimed it is a COP, but who is on the supply managed boards coming up with the prices-producers. There is virtually no consumer representation there.

In 2001, FCC allowed quota to be used as security on loans, and the banks soon followed, not happy about it though, but risked losing clients if they didn't, so we can factor that in also as a land price driver. Raube Beuerman, Dublin, ON

I rue the day FCC stopped lending on the productive value of land, and started lending on the market value of land.

Stephen Thompson, Clinton ON

I remember that very well. I sold out in 99,,after my FCC genius told me i would go broke, even though i had a million in equity,,quota,,but they didn t value that as safe collateral. I had struggled to expand ,,but just neede to add more cows to gain some cash flow. Quota was a seven year payback at that time. The DFO fieldman/genius told me,,oh dont buy quota now,, we are going to make as much from this export program we are introducing. We all remember what a nightmare that turned out to be. Quota values quickly became the #1 item on the balance sheets of many farm familys and allowed the less attractive areas of the province to become lender worthy.

The fallacy of believing quota is "safe" collateral is the mistaken belief that something which has no economic reason to exist, could ever be "safe". The greater-fool theory is at work here - is the greater-fool he who borrows money on the belief that quota is "safe", or he who lends money as if it is?

Stephen Thompson, Clinton ON

Surprisingly, your FCC lender gave you good advice. Cashflow is king. You can have all the equity in the world, but if the cashflow won't cover it, it's irrelevant. Quota may be important on some farms balance sheet, but it shouldn't be. Why should anyone be allowed to use the government license paper value of quota as a purchasing power advantage, when no other farmers and/or business can? Raube Beuerman, Dublin, ON

Different farms have been lost because of hog loop contracts that were not worth the paper they were wrote on .

but its not the same thing if that is what you are thinking. No bank or lending institution ever used a hog contract as collateral to my knowledge but I am open to being proved wrong. Raube Beuerman, Dublin, ON

In the early 1970's, USDA Secretary, Earl Butz, admonished US farmers to plant "fence-row to fence-row" to meet the sudden upsurge in demand from Russia. Then, as now, there were droughts, shortages, and so-called experts talking about the constantly-growing global demand for food. Pundits urged people to buy land because "they aren't making it anymore". The result was a land stampede with farmers (and bankers) throwing caution out the window - even a cover story in Fortune magazine in 1979 - "Investors in Farmland on dangerous ground", didn't stop farmers from feeding the "bubble". The result of this price/earnings bubble, created almost entirely by farmers, was, of course, that the price of land went down by 50% in the next five years, as anyone with a background in the investment business knew it would. It will happen again - it always does.

Stephen Thompson, Clinton ON

Farmland price bubbles almost always occur when farmers worship "false gods". The last land price bubble in the late 1970s was propelled by inflationary expectations, and to some extent export expectations, which didn't materialize - this time it's because the false gods of supply management, ethanol, and artificially-low interest rates, have each, and all, created a sort of fool's paradise for farmers, causing them to throw all normal business and investment principles out the window. We'll pay dearly for our indiscretions, not the least of which will be the refusal of governments to bail us out of a predicament we, ourselves, have clearly created.

Stephen Thompson, Clinton ON

You will have I am sure , read the letter that Mr. Gordon Hill submitted to the Ontario Farmer . It is true as he says that pork over production is their problem but I will add to it that not keeping up with cost's , raising larger carcas weight animals while shipping no less animals yields more pounds of pork which is more meat . Also pork has been the poster child for years at getting gov money every time they want it , with BUY OUT's no less not to produce all the while they never lowered production . Don't think low interest rates have not spurred on some livestock farmers also . You need to look at the whole picture . Not just cherry pick the ones you pretend to hate .

Supply management, ethanol, and low interest rates, have created a nightmare, a bubble, or whatever one wants to call a disaster waiting to happen, in agriculture, and all three are artificially created - there's absolutely no "cherry-picking" the truth. The only "cherry-picking" is done by those who try to defend the indefensible, which is what Mr. Hill was trying to do. The "whole" picture is that too many farmers, including Mr. Hill, feel it is their right to take advantage of, or at least ignore, the needs and wants of consumers, in any way possible, and that is abhorent for anyone to do, especially farmers. We are in business to serve consumers, not take advantage of them using artificially-created entitlements which benefit us, or, more accurately, which benefit only SOME of us.

Stephen Thompson, Clinton ON

Every economics and business student learns rather early that Hill's recommendation is, all at the same time, to quote well-known US pundit, H.L. Mencken, "neat, simple, and wrong". Hill ingores that facet of the cost/volume/profit equation which dictates that, for commodities, reduced volumes almost always increases per unit costs by more than any obtainable increase in the selling price can offset. That's why, in supply management, the "ratchet effect" comes into effect because every time costs go up, they increase prices which results in reduced consumption, which results in reduced supply, which, once again increases per unit costs, which results in increased prices, and so on, and so forth. That's exactly why milk consumption has dropped, and why the Canadian dairy sector is a high-cost, and stagnant, industry. Hill is, therefore, completely wrong to be advocating pork producers adopt the "paint themselves into a corner" mistakes made by supply management.

Stephen Thompson, Clinton ON

"But the most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly and with unflagging attention. It must confine itself to a few points and repeat them over and over. Here, as so often in this world, persistence is the first and most important requirement for success." -- Mein Kampf

I have been puzzled by the repetition of untrue anti supply management statements published here and the above philosophy came to mind-- Persistence, a few points repeated over and over. I'm getting a picture here.

Would match up with Gov always announcing and re-announcing the same programs over and over and over . Funny though you only see that happen in Agriculture and not other sectors .

When even the highly-partisan Dairy Farmers of Ontario publishes information showing that Ontario consumers were paying almost 38% more for milk than US consumers, and that the Ontario farmgate price of milk was within pennies per liter of the US retail price, not even the most-brilliant propagandist can disguise the obvious fact that Ontario consumers are being gouged, and that Ontario dairy farmers are doing it. In addition, even the most brilliant propagandist can't hide the fact that the delegates to the recent Ontario Pork annual convention voted overwhelmingly to urge government to place trade ahead of protection for supply management. I'm merely stating undeniable facts and drawing the obvious conclusions. The only propaganda being issued anywhere is by supply management supporters who keep mistakenly claiming, in spite of what DFO's own figures clearly show, and in spite of what Ontario Pork's resolution clearly states, that supply management is a "success" and that it doesn't gouge consumers. More to the point, the real danger of propaganda is that the people issuing it actually start to believe it, and, in the case of the propaganda coming from supply management, that is obviously what has happened.

Stephen Thompson, Clinton ON

Many people have disputed your facts. Most it seems do it once and move on. In other words they don't seem to repeat their statements.

Nobody has ever tried to dispute DFO's "facts", and the obvious implication of those facts which is that supply management gouges consumers and that the gouging is being done by farmers. Farmers, in a never-ending attempt to justify special treatment for themselves, constantly try to dispute basic economic principles in the same way that slave owners can always justify slavery, but it's always a losing battle. When it comes to believing, and promoting, their own particular economic fallacies, nobody does it more fiercely, and more repititiously, than farmers. I really do believe in the three verities of farming - death, taxes, and calls for protectionist legislation to favour a relatively few farmers at the expense of the rest of society and the economy.

Stephen Thompson, Clinton ON

Many people who expressed opposing views to yours may well believe they have proven you wrong. You believe otherwise.

Difference is in the repetition. Repeating something doesn't make it right. It just makes it, well, repeated.

Just because people have spent 40 years claiming supply management is wonderful, doesn't make it so, and one only has to look at DFO's own numbers, the recent resolution of Ontario Pork, and listen to any young, non-supply managed farmer. The repetition is entirely on the part of supply management supporters who never stop to think before they boast - and it's this empty boasting which is exactly why supply management is not well-liked, and will not be missed. Or, more to the point, there's economic truth opposing supply management, and there's wishful thinking supporting it. Supply management supporters on this site may not be the dumbest people I've ever tried to bring up to speed about basic economic principles, but they're certainly the most-obtuse. And, if I'm wrong, so is every economics textbook published for the last 150 years - that supply management is net-negative, is as basic to economics as water not running uphill is to physics.

Stephen Thompson, Clinton ON

So how many times would it be reasonable to repeat the same points on a particular topic before it could be considered propaganda?

Why is it propaganda when it's something you don't want to hear, but when it is something you want to hear, it isn't propaganda at all? Besides all that, propaganda is the repetition of the false half of half truth, something which economists are obliged to expose. For example, supply management supporters claim supply management isn't a subsidy, and in the narrowest possible sense, they're right, but they ignore that supply management is a consumer subsidy equivalent which, in economic terms, is far worse. So, I guess those of us who are, by professional principles, opposed to supply management, have 40 years of accumulated propaganda issued by supply management supporters to de-bunk. It's a tough job, but we owe it to the next generation to do it, and, for the most part, it's fun to see the outright apoplexy on the part of supply management supporters when they are forced to realize just exactly why supply management isn't well-liked, and won't be missed.

Stephen Thompson, Clinton ON

With propaganda representing what lobby groups are all about, I would have to say the DFO is all about propaganda considering that they are a federally registered lobby group.

Just because you don't like to hear it, doesn't make it propaganda!
I guess the real question is how many times does SM have to hear it before it sinks in?

Repetition is what kids do.

I'm right you're wrong.

If you don't do what I say I will call you names. I'm going to teach you a lesson.

Sound familiar?

Have you priced equipment parts lately between here and the US ?

It is a totally different gov and tax system over there , along with a much bigger population
Good gawd man every thing here is more expensive . Even BEER !!

For almost 40 years, DFO produced study, after study, after study, all purporting to show cross-border retail price equivalency for milk and dairy products. Yet, now that they can obviously no longer make that claim, supply management supporters, including yourself, are falling all over themselves to try to make us believe we're just as well off paying almost 38% more for milk as we were when we were supposedly paying nothing more - and that is a statistical impossibility, as well as an insult to everyone's intelligence. Why do supply management supporters believe we are too stupid to remember this almost 40 years of DFO boasting about cross-border retail price equivalency? You can't have it both ways, my anonymous friend.

Stephen Thompson, Clinton ON

Mr. R. S. Thompson you seem to be stuck in a rut about one thing and one thing only here . Open your eyes , take off your rose coloured glasses and see the rest of the forest and the reality here in this Country . It just costs more to live and do business here in Canada and even more so in Ontario .

As far as fighting for the so called poorest group of consumers , it is a bleeding heart make you feel good I am sure but the truth is this same group of consumers will spend more money on booze a month than they ever will on milk .

I'd be a tad-more hospitable towards DFO and/or supply management supporters if they hadn't fallen all over themselves for almost 40 years to boast, at every possible opportunity, about cross-border retail price equivalency for milk and dairy products, but now that they can't, they pretend that cross-border retail price equivalency was a bad dream that never happened. In addition, I wish all you supply management zealots would take off your own rose-coloured glasses and notice that beef, pork, vegetables, and fruit are NOT almost 38% more expensive in Canada than in the US, if they're anything more at all. It's supply management which has been stuck in a "rut" for 40 years, repeating the same drivel which wasn't true then, and is even less-true now - all I'm doing is countering this drivel with basic economic principles and undeniable fact published by DFO, the pillar of supply management, and, just like the "king with no clothes", supply management supporters just can't handle the truth. The reality is that supply management gouges consumers, pits farmers against one another, and is net-negative for jobs and economic activity, and I'll keep pointing out why, as long as people who should know better, go on this site to claim it isn't.

Stephen Thompson, Clinton ON

Ad hominem-- attacking your opponent instead of their argument

Ad Nauseum -- tireless repetition

Bandwagon and inevitable victory

Black & white fallacy-- or presenting only two options.. you are either with us or against us

Demonizing your opponent.

Many more on Wikipedia

I used to enjoy reading comments on this board but now it is a bore!!!!......do you think it will ever become stimulating again.there are plenty of relevant farming issues we could be discussing

G Kimble

I,ve wrote comments and all it is done to them is not showed. I would say more but I would like to see if this is printed.

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